• Bernstein maintains a "Market Perform" rating for Merck (NYSE:MRK), adjusting the price target from $95 to $100.
• Merck reports strong fourth-quarter 2025 results with adjusted EPS of $2.04 and revenues of $16.4 billion, driven by Keytruda sales.
• The company's 2026 revenue and EPS outlook falls short of analysts' expectations, prompting a decline in pre-market trading.

On February 4, 2026, Bernstein maintained its "Market Perform" rating for Merck (NYSE:MRK), advising investors to hold the stock. At the time, Merck's stock was priced at $115.86. Bernstein also adjusted Merck's price target from $95 to $100, reflecting a cautious optimism about the company's future performance.

Merck's fourth-quarter 2025 results were strong, with adjusted earnings per share (EPS) of $2.04, slightly above the Zacks Consensus Estimate of $2.03. This represents a 19% increase in earnings compared to the previous year. The company's revenues for the quarter reached $16.4 billion, a 5% year-over-year growth, surpassing the Zacks Consensus Estimate of $16.19 billion.

Keytruda, Merck's flagship product, significantly contributed to this success, generating $8.37 billion in sales during the quarter, marking a 5% increase. Despite these positive results, Merck's shares declined in pre-market trading due to a disappointing 2026 outlook, which fell short of investors' expectations for revenues and earnings.

Merck's 2026 revenue projection is between $65.5 billion and $67 billion, below analysts' estimates of $67.6 billion. The company expects adjusted EPS between $5 and $5.15, compared to the anticipated $5.36. This outlook includes a $9 billion one-time charge related to the acquisition of Cidara Therapeutics and accounts for upcoming patent expirations and pricing adjustments due to a US government drug pricing agreement.

To address these challenges, Merck plans to reduce costs by $3 billion by 2027 and continue investing in its pipeline and acquisitions. This strategy aims to mitigate the effects of future patent expirations, including the anticipated loss of exclusivity for Keytruda in 2028. Despite the challenges, Merck's market capitalization remains robust at approximately $289.39 billion, with a trading volume of 25.57 million shares.